The main digital currency has plunged below $10K, down 30% from the previous week’s peak at $13.7K, according to Coinmarketcap market tracker.
Experts believe Bitcoin’s beginning-of-year rally was due to most investors’ strategy to save: they began to keep their Bitcoins longer and buy more often than sell. With demand being the only driver of any cryptocurrency’s price, Bitcoin began to grow.
“What is happening now in the Bitcoin market is very similar to a situation where a major player puts their crypto assets on the market and cuts their own short positions,” notes Murad Salikhov, advisor to the chairman of the board of the Financial Innovations Association. “Seeing this state of affairs, less patient investors begin to sell off their assets, waiting for the uptrend to change. This is the only explanation for combination of the BTC loss of 30% and the low number of short positions in the market.”
Furthermore, the payment day on futures contracts brought large numbers of Bitcoins at varying prices, as well as many players ready to return to the market.
“There is a high probability that the current drop is a deliberate action with the aim of ousting extra players and knocking down prices to buy off BTC: in this case the price will not fall below $8.9K and will rebound by the end of the week,” the expert predicts.